Note4Students
From UPSC perspective, the following things are important :
Prelims level: SEBI
Mains level: Paper 3- Issues with corporate governance in India
Context
Over the past 10 days, the revelations about the functioning of the National Stock Exchange (NSE) during the tenure of Chitra Ramkrishna as Managing Director and Chief Executive Officer (CEO) have raised questions about the governance.
Managerial misconduct at NSE
- There was managerial misconduct at NSE.
- An effective board of directors: That is why we need checks on management such as an effective board of directors.
- After the board was informed about the irregularities in Mr. Subramanian’s appointment, it discussed the matter but chose to keep the discussions out of the minutes on grounds of confidentiality and the sensitivity of the matter.
- Second, despite being aware of Ms. Ramkrishna’s transgressions, it allowed her to resign and on generous terms instead of taking action against her.
- Third, the Public Interest Directors (PIDs) failed to keep SEBI informed about the goings-on at the NSE.
Issues with corporate governance
- In the corporate world, much is forgiven on grounds of performance.
- When a performing CEO chooses to unduly favour a particular individual or individuals, boards see that as a forgivable infirmity.
- As for dysfunctional or ineffective boards, these remain the norm despite numerous regulations, seminars and papers over the past four decades.
- In case of the the NSE, the problem is structural.
- Selection and absence of penalty: It has to do partly with the way board members are selected and partly with the absence of penalties where directors do not live up to their mandate.
- Board members are selected by top management (or, in India, by the promoter who is also top management).
- Board members have every incentive to nod their heads to whatever the management wants to be done.
Way forward
- 1] Diversity in the selection of board members: As long as the top management selects all board members or can influence their selection, there is little hope of any active challenge to management.
- The top management must be allowed to choose not more than 50% of the independent directors.
- The rest must be chosen by various other stakeholders — financial institutions, banks, small shareholders, employees, etc.
- 2] Accountability of board members: A second thing that needs to happen is holding board members accountable for lapses.
- Regulators act against directors where there is financial malfeasance.
- This must change. Regulators must penalise errant directors through a whole range of instruments — strictures, financial penalties, removal from boards and a permanent ban from board membership.
- 3] Accountability of regulator: Regulators themselves must be held to account.
- In the NSE affair, questions have been asked of SEBI.
- For instance, why did SEBI not seek the help of the cyber police to ascertain the identity of the yogi?
- SEBI needs to explain itself.
Conclusion
Convulsions of outrage after particular episodes will not take us very far. We need significant institutional reform if corporate governance is not to remain an illusion.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Three Seas Initiative
Mains level: Paper 2- Rethinking India's position on Ukraine crisis
Context
As diplomatic efforts to de-escalate the crisis in Ukraine continue, the time has come for Delhi to devote greater attention to Central Europe, which is at the heart of the contestation between Russia and the West.
Recognising the role of Central Europe in shaping the geopolitics of Europe
- Central Europe today has an identity of its own and the political agency to reshape European geopolitics.
- It is important to remember that Central Europe is no longer just a piece of territory that Russia and the Western powers can divide into “spheres of influence”.
- A grand bargain between Russia and the West will work only if it is acceptable to Central Europe.
Need for diplomatic balancing on Ukraine by India
- As war clouds gather over Ukraine, there is much focus on India’s diplomatic balancing act, its unwillingness to publicly caution Russia against invading Ukraine, and above all its reluctance to defend Ukraine’s sovereignty.
- This is not the first time that Russia’s approach to Central Europe has put Delhi in a tight corner.
- The Soviet invasion of Hungary in 1956, and Czechoslovakia in 1968, exposed an important tension in Indian diplomacy.
- In Central Europe, India’s pragmatism in not offending Moscow (an important partner) runs against the utter unacceptability of Putin’s doctrine of “limited sovereignty”, a continuation of the Soviet era policy of saying that the socialist states must subordinate their sovereignty for the sake of the “collective interests of the socialist bloc”.
Factors shaping India’s stand
- Tension with China: The prospective Russian invasion of Ukraine comes amidst India’s military tensions with China and Delhi’s continued dependence on Moscow’s military supplies.
- It also comes at a time when Delhi is trying to build an international coalition against China’s brazen attacks on the territorial sovereignty of its Asian neighbours.
- For the moment, Delhi is in a safe corner by calling for diplomacy in resolving the Ukraine crisis.
- But if Russia does invade Ukraine, the pressure on India to rethink its position will mount.
- Any such review must eventually lead to an independent appreciation of the geopolitics of Central Europe.
Five factors that must shape India’s perspective on the geopolitics of Central Europe
- 1] No taker for sphere of influence: Russia’s claim for a broad sphere of influence in the region has no takers in Central Europe.
- 2]Need for political accommodation: While Russia has legitimate security interests in Central Europe, they can only be realised through political accommodation.
- Moscow cannot enforce a sphere of influence against the will of its prospective members.
- 3] NATO as better option: few Central Europeans buy into the French vision for “European sovereignty” and “strategic autonomy”.
- They bet that NATO, led by the US, is a better option than a Europe that is independent of Washington.
- They view with even greater distaste the prospects for Russo-German condominium over Central Europe.
- 4] Resentment against imposition of political value:While they are eager to be part of the Western institutions, Central Europeans resent any attempt by the US and EU to impose political values that run against their traditional cultures.
- 5] Sub regional institution: Central Europeans are eager to develop sub-regional institutions that can enhance their identity.
- The Visegrad Four — Poland, Hungary, Czech Republic, and Slovakia — is one of them.
- The so-called “Three Seas Initiative” brings together 12 European states running in a vertical axis from the Baltic Sea in the north to the Adriatic and Black Sea in the south.
Conclusion
Delhi can’t forever view this critical region through the prism of Russia’s conflict with the West. It must come to terms with its growing strategic significance.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: CRZ
Mains level: Sea level rise and threats to coastal cities
The Brihanmumbai Municipal Corporation (BMC) inspected a bungalow owned by a Union Minister for alleged violation of Coastal Regulation Zone (CRZ) norms.
What is the news?
- The Union Minister’s bungalow named has been illicitly constructed within 50 metres of the sea in violation of the CRZ rules.
- The crackdown assumes significance in the escalating verbal spats between the two political rivals (which were allies for years).
What are CRZ norms?
- In India, the CRZ Rules govern human and industrial activity close to the coastline, in order to protect the fragile ecosystems near the sea.
- They restrict certain kinds of activities — like large constructions, setting up of new industries, storage or disposal of hazardous material, mining, reclamation and bunding — within a certain distance from the coastline.
- After the passing of the Environment Protection Act in 1986, CRZ Rules were first framed in 1991.
- After these were found to be restrictive, the Centre notified new Rules in 2011, which also included exemptions for the construction of the Navi Mumbai airport and for projects of the Department of Atomic Energy.
- While the CRZ Rules are made by the Union environment ministry, implementation is to be ensured by state governments through their Coastal Zone Management Authorities.
Where do they apply?
- In all Rules, the regulation zone has been defined as the area up to 500 m from the high-tide line.
- The restrictions depend on criteria such as the population of the area, the ecological sensitivity, the distance from the shore, and whether the area had been designated as a natural park or wildlife zone.
- The latest Rules have a no-development zone of 20 m for all islands close to the mainland coast, and for all backwater islands in the mainland.
New Rules under CRZ regulations
- The government notified new CRZ Rules with the stated objectives of promoting sustainable development and conserving coastal environments.
- For the so-called CRZ-III (Rural) areas, two separate categories have been stipulated.
- In the densely populated rural areas (CRZ-IIIA) with a population density of 2,161 per sq km as per the 2011 Census, the no-development zone is now 50 m from the high-tide level, as against the 200 m stipulated earlier.
- In the CRZ-IIIB category (rural areas with population density below 2,161 per sq km) continue to have a no-development zone extending up to 200 m from the high-tide line.
- The new Rules have a no-development zone of 20 m for all islands close to the mainland coast, and for all backwater islands in the mainland.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Satellite Internet
Mains level: Not Much
The Reliance has launched a joint venture (JV) with European satellite-based broadband service company SES to enter the satellite internet space.
What is Satellite Internet?
- The technology beams the internet down from a satellite that’s orbiting the Earth.
- Jio, Bharti Airtel Ltd’s OneWeb, and billionaire Elon Musk’s Starlink want to send thousands of these satellites to orbit.
- OneWeb plans to launch 648 satellites, while Musk’s Starlink has permits to launch over 4,000 of them.
- So far, OneWeb has launched over 400 satellites, while Starlink has launched over 2,000 satellites.
- It’s worth noting that Starlink plans to launch 42,000 satellites in the coming decade. Jio’s journey has only just begun.
Which satellites will Indian JV use?
- The JV will use geostationary (GEO) and medium earth orbit (MEO) satellites, while Starlink and OneWeb use low earth orbit (LEO) satellites.
- LEO satellites are cheaper to make and deploy, but require a satellite constellation working in sync to offer coverage on earth.
- On the other hand, GEO and MEO satellites are larger, deployed in higher orbits, and therefore cost more.
- These satellites cover a larger area and require fewer ground stations, which makes them ideal for targeted coverage area.
- LEOs move faster and can hence provide global coverage.
What are the advantages of satellite internet?
- The reason telecom firms want to explore satellite internet is because there are areas where fibre connections just can’t reach.
- Satellite networks are used to bring connectivity in such areas, which include hills and remote islands.
- Consumer applications are new, but satellite networks have been used for ages in military applications.
Are there any disadvantages?
- The applications and the power of satellite internet are often exaggerated.
- In reality, these networks have limitations, the biggest being high latency and low bandwidths.
- Latency is all about internet speed, while bandwidth determines how many devices can connect on a network at the same time.
- Experts say current satellite connections will bring 1-2 MB bandwidth, which just about qualifies as broadband under India’s broadband policy.
- Trouble-shooting can be a problem because it needs specialized knowledge.
Who can use satellite internet?
- Militaries across the world have depended on satellite communications for a long time.
- However, many military experts, too, consider this form to be unreliable and too expensive to be made the sole communication medium.
- In remote areas, satellite internet can still allow businesses to open up local branches and provide digital services.
- In theory, a bank could set up more ATMs in remote regions if it has access to satellite internet.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fundamental Duties
Mains level: FD vs DPSP vs FR
The Supreme Court has asked the Union and the State governments to respond to a petition to enforce the fundamental duties of citizens, including patriotism and unity of the nation, through comprehensive, well-defined laws.
What did the plea say?
- The plea emphasized- the need to enforce FD arises from a new illegal trend of protest by protesters in the garb of freedom of speech and expression.
- This has been increasingly done by way of blocking of road and rail routes in order to compel the government to meet their demands.
What are Fundamental Duties?
- The fundamental duties of citizens were added to the constitution by the 42nd Amendment in 1976, upon the recommendations of the Swaran Singh Committee.
- It basically imply the moral obligations of all citizens of a country and today, there are 11 fundamental duties in India, which are written in Part IV-A of the Constitution, to promote patriotism and strengthen the unity of India.
- The FDs obligate all citizens to respect the national symbols of India, including the constitution, to cherish its heritage, preserve its composite culture and assist in its defence.
- They also obligate all Indians to promote the spirit of common brotherhood, protect the environment and public property, develop scientific temper, abjure violence, and strive towards excellence in all spheres of life.
Judicial interpretation of FDs
- The Supreme Court has held that FDs are not enforceable in any Court of Law.
- It ruled that these fundamental duties can also help the court to decide the constitutionality of a law passed by the legislature.
- There is a reference to such duties in international instruments such as the Universal Declaration of Human Rights and International Covenant on Civil and Political Rights, and Article 51A brings the Indian constitution into conformity with these treaties.
Total FDs
- Originally ten in number, the fundamental duties were increased to eleven by the 86th Amendment in 2002.
The 10 fundamental duties are as follows:
- To oblige with the Indian Constitution and respect the National Anthem and Flag
- To cherish and follow the noble ideas that inspired the national struggle for freedom
- To protect the integrity, sovereignty, and unity of India
- To defend the country and perform national services if and when the country requires
- To promote the spirit of harmony and brotherhood amongst all the people of India and renounce any practices that are derogatory to women
- To cherish and preserve the rich national heritage of our composite culture
- To protect and improve the natural environment including lakes, wildlife, rivers, forests, etc.
- To develop scientific temper, humanism, and spirit of inquiry
- To safeguard all public property
- To strive towards excellence in all genres of individual and collective activities
The 11th fundamental duty which was added to this list is:
- To provide opportunities for education to children between 6-14 years of age, and duty as parents to ensure that such opportunities are being awarded to their child. (86th Amendment, 2002)
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: EV Battery Swapping Policy
Mains level: Electric mobility
NITI Aayog is holding a consultation on the upcoming electric vehicle (EV) battery swapping policy.
What is BaaS?
- Battery-as-a-service (BaaS) is seen as a viable charging alternative.
- Manufacturers can sell EVs in two forms: Vehicles with fixed or removable batteries and vehicles with batteries on lease.
- If you buy an electric scooter with battery leasing, you do not pay for the cost of the battery—that makes the initial acquisition almost 40% cheaper.
- Users can swap drained batteries for a fully charged one at a swap station. The depleted batteries are then charged on or off-site.
- The advantages of swapping include low downtimes for commercial fleets, reduced space requirements, and lower upfront costs.
- It is also a viable solution for those who don’t have parking spots at home.
What is battery interoperability?
- That’s when a battery is compatible across vehicles and chargers, so you can seamlessly swap a battery at any swap station. This can help achieve scale.
- However, manufacturer and service providers say there are safety concerns around the ‘one-size-fits-all’ model and caution too much standardization can kill innovation.
Why hasn’t BaaS taken off yet?
- There are economic and operational constraints.
- Energy service providers offering swapping solutions have to charge 18% goods and services tax (GST) for swapping, compared to 5% GST on the purchase of an EV.
- Additionally, the government’s FAME-II incentives are not offered to vehicles sold with BaaS or swap station operators.
- While these are economic disadvantages compared to direct charging solutions, the lack of a dense and interoperable battery swap infrastructure has also hindered the roll-out.
- Manufacturers, on the other hand, are keen to create proprietary battery and charging systems.
Issues with BaaS
- There is a need for standardization of safety specifications as well as the battery.
- Swapping in the various permutations and combinations of batteries at a station where they have not been tested for compatibility could lead to safety hazards.
- Also, mandating only one type of battery to be eligible for concessions would be disadvantageous to many players.
Who offers BaaS in India?
- Bengaluru-based startup Bounce is the first e-two-wheeler maker to sell its scooters with BaaS, and claims to have achieved a million battery swaps.
- Others like Ola Electric and Ather have stuck to direct charging solutions, while Hero Electric offers both fixed and removable batteries.
- Many makers are working with energy service providers to offer battery swapping.
- The global precedent is a mixed bag: Ample, which offers swaps in the US, has found success with commercial fleets, while most personal users charge at home.
Why is Battery Swapping needed?
- High Cost of EVs: An EV, by industry standards, is 1.5-2x costlier than IC Engine counterpart and at least half the cost is from the battery pack.
- Cost reduction: Many manufacturers are offering batteries separately from a vehicle, reducing the cost. In that case, a fleet owner can buy vehicles without battery and utilize battery swapping.
- Range Anxiety: Another major reason stopping people from buying EVs is range anxiety, or in simple terms, the fear of battery getting empty without finding a charging station.
- Inadequate charging infrastructure: Unlike petrol pumps, EV charging stations are rare to spot and that further increases the range anxiety exponentially, especially while going on a road trip.
- Hazard management: In case of a Swapping Station, one can simply locate a station, go and replace the empty battery with a new one.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fleet Review
Mains level: Indian Naval Arsenal
The President of India recently took part in the Indian Navy’s 12th Presidential Fleet Review.
What is the President’s Fleet Review?
- In simplest terms, it is the country’s President taking stock of the Navy’s capability.
- It showcases all types of ships and capabilities the Navy has.
- It takes place once under every President, who is the supreme commander of the armed forces.
- The President is taken on one of the Naval ships, which is called the President’s Yacht, to look at all the ships docked on one of the Naval ports.
- The yacht will be distinguished by the Ashoka Emblem on her side and will fly the President’s Standard on the Mast”.
Importance of Presidential Fleet Review
- A fleet review is usually conducted once during the tenure of the President.
- So far, 11 Presidential Fleet Reviews have been conducted since Independence, of which two have been International Fleet Reviews, in 2001 and 2016.
- In terms of significance, the Navy’s Presidential review is second only to the Republic Day Parade.
- The President will be given a 21-gun salute before embarking on the yacht.
Do all naval ships participate?
- The idea is to showcase not all the Navy’s ships, but every type of ship — and the kind of capabilities it has at that time.
- The review also includes merchant ships as well.
What else happens in the fleet review?
- In this most formal of naval ceremonials, each ship dressed in full regalia will salute the President as he passes.
- The President will also be reviewing the Indian Naval Air Arm in a display of spectacular fly-past by several helicopters and fixed-wing aircraft.
- In the final stage of the review, a mobile column of warships and submarines will steam past the Presidential Yacht.
How many of these reviews have been held?
- There have been 11 President’s Fleet Reviews since Independence.
- The first was conducted in 1953, under Dr Rajendra Prasad.
- The next one was done not by the President but by the then Defence Minister, Y B Chavan, in 1964.
- Since then, it has been the President reviewing the fleet.
- The longest gap between reviews was of 12 years — between 1989 (President R Venkatraman) and when 2001 (President K R Narayanan).
- The last one was done in 2016, under President Pranab Mukherjee.
Significance of the event
- It is one of the most important events for the Navy, which is essentially showing its allegiance and commitment to defending the country.
- It is a long-standing tradition followed by navies across the world, and according to Navy officials it is a strong bond that links seafarers of the world.
- Historically, a Fleet Review is an assembly of ships at a pre-designated place for the purpose of displaying loyalty and allegiance to the Sovereign and the state.
- In turn, the Sovereign, by reviewing the ships, reaffirms his faith in the fleet and its ability to defend the nation’s maritime interest.
- It is perhaps conceived as a show of naval might. Though it still has the same connotation, assembling of warships without any belligerent intentions is now the norm in modern times.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: FRBM Act
Mains level: Paper 2- Challenges in policy making
Context
Given the fact that political input in economic policymaking is becoming dominant as regional and state-level issues assume overriding significance, it’s perhaps time to consider sheltering economics from politics and vice versa.
Continuity in policy
- The sudden withdrawal of farm laws last year and the repeal of the land acquisition ordinance in 2015 are two examples of policy backsliding in an otherwise decent record of policy continuity since 1991.
- The overall trajectory of tariffs has been downward and average tariffs are now below 10 percent compared to over 400 percent before 1991.
- As a favored rule, domestic policy priorities should not be held hostage to external pressures, but they can and ought to be used to push through difficult and desirable domestic reform.
Challenges in achieving high growth
- Challenges in reforms: Relying on chance events to drive reform might work in rare circumstances, but not when the aspiration is to become a $10 trillion economy by 2030.
- Realizing this target or even coming close to it will require sustained growth of over 15 percent per annum in nominal GDP — that’s no mean task.
- The golden period of India’s growth fetched an 8.1 percent increase in real GDP between 2004 and 2009.
- Even during this period, the growth story was cut short by the global financial crisis and devilled intermittently by institutional weaknesses.
- Failure of institutions: The coal scam and the 2G scam are examples of the inability of institutions to keep pace with rapid growth.
- As growth occurs, institutions also require sophistication, knowledge, and some (not complete) protection from political interference.
Need for the fiscal council for budget-making process
- The Monetary Policy Committee (MPC) in 2016, replaced RBI’s internal decision-making driven by the central bank governor to include three external experts to strengthen and bring transparency into monetary policy decisions.
- This can be extended to other important government functions, such as the budgetary process
- Successive finance commissions and the Fiscal Responsibility and Budget Management (FRBM) Review Committee have recommended the creation of a fiscal council that, like the MPC, will bring transparency in the budget-making process.
- The idea is simple, moderate the influence of the political agenda and powerful interest groups that could, and often do, capture the process.
Suggestions on policymaking
- It is art and science: Policymaking is nothing if not art that invokes science when expedient.
- Domain experts should be an integral part of the formulation process.
- Implementation, of course, can be left to the executive.
- When the TRAI was first set up, it had a healthy combination of domain experts and public policy professionals, resembling a specialized regulatory agency that reflected a serious intent to strengthen capacity.
- Importance of domain experts: Instead of going down the chosen path, TRAI has reversed gear and today resembles a government department.
- In fact, this is the same affliction with almost all regulatory and policy institutions that are now a feature of India’s increasingly market-based economy.
- As more sectors (for example, the Gati Shakti initiative) engage the private sector, lessons from the last quarter-century should not be wasted — domain expertise is conspicuous by its absence in regulatory and policy institutions.
Way forward
- Create a cadre of professionals: Commissions tend to be made up of retired civil servants or retired judges.
- This is worrying and, therefore, it is vital to create a cadre of professionals with technical expertise for the complex tasks of managing the policy processes.
- Distancing politics from the policy: The net needs to be cast wider so that politics and policy are distanced, not completely but certainly more than it is today.
Consider the question “Politicians and economists have a love-hate relationship; they can’t do without each other. In context of this examine the issues with policymaking in India and why role of the domain expert is important in policymaking today?”
Conclusion
India should not be in a situation in which it is in perpetual hostage to vested interests of politics and business.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now